TBCC Tbc Corp (MM)

TBC Reports Record 2004 Fourth Quarter and Full-Year Results PALM BEACH GARDENS, Fla., Feb. 22 /PRNewswire-FirstCall/ -- TBC Corporation (NASDAQ:TBCC), one of the nation's leading marketers of automotive replacement tires, today reported sales and earnings for the fourth quarter and year ended December 31, 2004. Net sales in the fourth quarter increased 31.6% to $487.8 million compared to $370.7 million in the fourth quarter of 2003. Total unit tire sales increased 21.1% compared to a 3.3% increase in unit shipments by tire manufacturers in the fourth quarter (based on preliminary reports). Same store sales for TBC's retail segment increased 2.9% in the fourth quarter of 2004. Net income for the fourth quarter of 2004 was $12.1 million, or $0.52 per diluted share, versus $9.6 million, or $0.41 per diluted share, in the fourth quarter of 2003. Results for the fourth quarter of 2004 included an after-tax charge of $0.9 million, or $0.04 per diluted share, due to the final disposition of discontinued inventories purchased in connection with the NTB acquisition. Results for the fourth quarter of 2003 have been restated to reflect the Company-wide adoption of the FIFO inventory costing method. During the fourth quarter, TBC's retail segment benefited from the full quarter contribution of the NTB stores acquired in December of 2003 as well as a favorable service sales mix, and increased sell-through of higher-margin, private brand tires. Additionally, the fourth quarter benefited from the return of previously lost business due to the hurricanes. The Company's wholesale business performed well with higher sales as a result of volume gains and price increases. "Fourth quarter results demonstrate positive momentum in both our retail and wholesale units," commented Larry Day, TBC President and Chief Executive Officer. "Within our retail segment, sales were driven by an increase in tire demand and continued expansion in mechanical services. Overall, we were pleased with the performance of our Company-operated stores throughout 2004, and Big O turned in a solid performance for the quarter and the year. Within our wholesale business, we experienced revenue growth in the fourth quarter as our Private Brands Division performed well, and we continued to focus on higher margin niche products and delivering superior fill rates to our customers." For the year ended December 31, 2004, the Company reported a 40.7% increase in net sales from $1,318.5 million in 2003 to $1,854.6 million in 2004. Total unit tire sales increased 19.6% during the year compared to a 3.0% increase in unit shipments by tire manufacturers (based on preliminary reports). Additionally, same store sales for TBC's retail segment increased 2.0% in 2004. Net income in 2004 was $37.6 million, or $1.62 per diluted share, versus $32.2 million, or $1.42 per diluted share, in 2003. Results for 2003 have been restated to reflect the Company-wide adoption of the FIFO inventory costing method. Net income for 2004 reflects the fourth quarter after-tax charge of $0.9 million, or $0.04 per diluted share, due to the final disposition of discontinued inventories purchased in connection with the NTB acquisition. Results for 2004 also include the negative impact of EITF 02-16 of $0.10 per diluted share and an estimated negative $0.12 per diluted share impact from the four major hurricanes in the third quarter, offset by a positive $0.03 per diluted share post-hurricane impact in the fourth quarter. For 2005, the Company currently expects earnings in the range of $2.08 to $2.15 per diluted share. For the first quarter, the Company projects earnings in the range of $0.24 to $0.28 per diluted share. At December 31, 2004, the Company had a combined total of 1,172 stores in its retail network with 605 Company-operated locations and 567 franchised Big O stores. In fiscal 2005, the Company expects to add 20 to 30 stores to its Company-operated retail network and 15 to 20 new Big O franchise locations. Mr. Day concluded, "While we are in a seasonally slow period, we are encouraged by the acceptance of earlier price increases and overall demand trends. Within this more favorable environment, we see opportunities to drive additional sales through our retail channel with expanded service and product offerings. The acquired NTB stores were on plan in 2004 with solid prospects for 2005. We also expect to realize cost efficiencies and the benefits of a larger scale operation. We remain focused on improving our EBITDA margin in our retail operations in 2005, targeting a goal of 8% by year-end." "In terms of new store growth, we did not achieve our recent goals. However, we are confident in our ability to meet our 2005 objectives with the addition of new Company stores in existing and contiguous markets. As well, with a strengthened business development team in place at Big O, we plan to aggressively target existing independent tire dealers and convert them into franchisees." TBC Corporation will host a conference call on Wednesday, February 23, 2005, at 10:00 a.m. Eastern Time / 9:00 a.m. Central Time, to discuss fourth quarter results. A live Webcast of the conference call will be available by visiting the Company's Web site, http://www.tbccorp.com/. The Webcast will be archived at TBC's Web site until March 22, 2005. TBC Corporation also announces that it has changed its 2005 Annual Meeting of Stockholders previously scheduled for Wednesday, May 4, 2005. The meeting will be held at the PGA National Resort, 400 Avenue of the Champions, Palm Beach Gardens, Florida on Thursday, May 12, 2005, at 9:00 a.m., local time. About TBC: TBC Corporation is one of the nation's largest marketers of automotive replacement tires through a multi-channel strategy. The Company's retail operations include company-operated retail centers under the "Tire Kingdom", "Merchant's Tire & Auto Centers" and "National Tire & Battery" brands and franchised retail tire stores under the "Big O Tires" brand. TBC markets on a wholesale basis to regional tire chains and distributors serving independent tire dealers throughout the United States and in Canada and Mexico. The Company's proprietary brands of tires have a longstanding reputation for quality, safety and value. TBC Corporation Safe Harbor Statement This document contains "forward-looking statements," as that term is defined under the Private Securities Litigation Reform Act of 1995, regarding expectations for future financial performance, which involve uncertainty and risk. It is possible that the Company's future financial performance may differ from expectations due to a variety of factors including, but not limited to: changes in economic and business conditions in the world; increased competitive activity; consolidation within and among competitors, suppliers and customers; unexpected changes in the replacement tire market; the Company's inability to attract as many new franchisees or open as many distribution outlets as stated in its goals; changes in the Company's ability to identify and acquire additional companies in the replacement tire industry and successfully integrate acquisitions and achieve anticipated synergies or savings; fluctuations in tire prices charged by manufacturers, including fluctuations due to changes in raw material and energy prices, changes in interest and foreign exchange rates; the cyclical nature of the automotive industry and the loss of a major customer or program. It is not possible to foresee or identify all such factors. Any forward-looking statements in this release are based on certain assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Prospective investors are cautioned that any such statements are not a guarantee of future performance and actual results or developments may differ materially from those projected. The Company makes no commitment to update any forward-looking statement included herein, or to disclose any facts, events or circumstances that may affect the accuracy of any forward-looking statement. Additional information on factors that could potentially affect the Company or its financial results may be found in the Company's filings with the Securities and Exchange Commission. TBC CORPORATION RESTATED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited) Three Months Ended Year Ended December 31, December 31, RESTATED RESTATED 2004 2003 2004 2003 NET SALES $487,758 $370,742 $1,854,553 $1,318,531 COST OF SALES 306,351 235,357 1,160,828 884,645 GROSS PROFIT 181,407 135,385 693,725 433,886 EXPENSES: Distribution expenses 19,484 16,765 74,284 61,356 Selling, administrative and retail store expenses 139,790 100,942 547,169 314,760 Interest expense - net 4,768 3,363 18,663 10,409 Other (income) expense - net (1,447) (259) (4,722) (2,547) Total expenses 162,595 120,811 635,394 383,978 INCOME BEFORE INCOME TAXES 18,812 14,574 58,331 49,908 Provision for income taxes 6,728 4,996 20,695 17,723 NET INCOME $12,084 $9,578 $37,636 $32,185 EARNINGS PER SHARE - Basic $0.55 $0.44 $1.70 $1.49 Diluted $0.52 $0.41 $1.62 $1.42 Weighted Average Common Shares Outstanding - Basic 22,280 21,871 22,190 21,649 Diluted 23,297 23,270 23,280 22,743 TBC CORPORATION RESTATED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) ASSETS RESTATED December 31, December 31, 2004 2003 (Unaudited) (Unaudited) CURRENT ASSETS: Cash and cash equivalents $2,832 $2,645 Accounts and notes receivable, less allowance for doubtful accounts of $9,707 at December 31, 2004 and $8,260 at December 31, 2003 Related parties 32,149 12,535 Other 117,812 109,962 Total accounts and notes receivable 149,961 122,497 Inventories 290,967 264,810 Refundable federal and state income taxes - 296 Deferred income taxes 23,536 11,359 Other current assets 20,000 10,346 Total current assets 487,296 411,953 PROPERTY, PLANT AND EQUIPMENT, AT COST: Land and improvements 10,400 12,100 Buildings and leasehold improvements 109,959 103,669 Furniture and equipment 104,914 93,710 225,273 209,479 Less accumulated depreciation 72,617 56,618 Total property, plant and equipment 152,656 152,861 TRADEMARKS, NET 15,824 15,824 GOODWILL, NET 180,729 169,184 OTHER ASSETS 39,180 34,368 TOTAL ASSETS $875,685 $784,190 TBC CORPORATION RESTATED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY RESTATED December 31, December 31, 2004 2003 (Unaudited) (Unaudited) CURRENT LIABILITIES: Outstanding checks, net $30,368 $11,411 Notes payable to banks 41,013 29,100 Current portion of long-term debt and capital lease obligations 41,216 28,723 Accounts payable, trade 127,283 114,708 Federal and State Income Taxes Payable 17,622 - Other current liabilities 93,302 91,730 Total current liabilities 350,804 275,672 LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, LESS CURRENT PORTION 167,349 208,620 NONCURRENT LIABILITIES 40,417 28,900 DEFERRED INCOME TAXES 11,279 7,890 STOCKHOLDERS' EQUITY: Common stock, $0.10 par value, shares issued and outstanding - 22,312 at December 31, 2004 and 21,905 at December 31, 2003 2,231 2,190 Additional paid-in capital 28,882 23,898 Other comprehensive income (loss) (1,569) (1,637) Retained earnings 276,292 238,657 Total stockholders' equity 305,836 263,108 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $875,685 $784,190 TBC CORPORATION SUPPLEMENTARY DATA (In thousands, except percentages and store counts) (Unaudited) Three Months Ended Year Ended December 31, December 31, RESTATED RESTATED 2004 2003 2004 2003 RECONCILIATION OF EBITDA TO NET INCOME: EBITDA $30,344 $22,462 $103,737 $78,545 Less Depreciation and - Amortization 6,764 4,525 26,743 18,228 Interest Expense - net 4,768 3,363 18,663 10,409 Provision for Income Taxes 6,728 4,996 20,695 17,723 NET INCOME $12,084 $9,578 $37,636 $32,185 SEGMENT INFORMATION: NET SALES - Retail $310,963 $230,706 $1,192,496 $734,073 Wholesale $176,795 $140,036 $662,057 $584,458 Consolidated $487,758 $370,742 $1,854,553 $1,318,531 EBITDA - Retail $20,874 $15,957 $68,111 $51,087 Wholesale $9,470 $6,505 $35,626 $27,458 Consolidated $30,344 $22,462 $103,737 $78,545 CAPITAL EXPENDITURES $7,390 $6,432 $25,506 $21,017 RETAIL SAME-STORE SALES % CHANGE 2.9% 4.5% 2.0% 2.1% RETAIL STORE COUNTS, at end of period Company Operated Stores 605 591 Franchised Big O Stores 567 576 Total 1,172 1,167 DATASOURCE: TBC Corporation CONTACT: Thomas W. Garvey, Executive V.P. & Chief Financial Officer of TBC Corporation, +1-561-227-0955; or Investors, Betsy Brod/Jonathan Schaffer, both of Brod & Schaffer, LLC, +1-212-750-5800, for TBC Corporation Web site: http://www.tbccorp.com/

Copyright